Recent News
Boston-based OneUnited Bank has announced the winners of its annual I Got Bank! Essay Contest. The three winners were Chase Abner, 12, of Los Angeles, Calif., Damoni Swain, 10, of Dorchester, Massachusetts, and Amaya Horace, 12, of Bowie, Maryland. Each won a $1,000 savings account for their essays on financial literacy. “We are very proud of all of the youth and their families who participated,” said Teri Williams, OneUnited Bank president and author of "I Got Bank!" a financial literacy guide targeted at urban youth.
Melrose Park, Ill.-based Pan American Bank has received approval from federal and state authorities to acquire the Palatine, Ill.-based Bank of Palatine. The deal is expected to close by early September and allow Pan American to increase its assets by about $50 million. Bank of Palatine President Winn C. Davidson will retire upon completion of the acquisition. "This merger provides us the opportunity to expand our high level of service to clients throughout the Northwest suburbs," said Pan American Co-CEO Nicholas Giuliano. "It also represents the next step in our strategy... Read more
An investigation by New York State Prosecutors has culminated with criminal charges against a dozen companies and their owner, Carey Vaughn Brown. Prosecutors accuse Brown and his companies of enabling payday loans that flouted the state’s limits on interest rates. They allege that Brown assembled “a payday syndicate” that controlled every facet of the loan process. The operation began when borrowers applied for loans on websites like MyCashNow.com. From there, borrowers’ information was passed to another company that originated the loans. The information then wound up with yet another... Read more
Longform rantmaker John Oliver criticized the payday lending industry on his HBO show, Last Week Tonight (warning: language not safe for work). Oliver's show has won praise recently for its ability to make complex issues accessible to large web-savvy audience. In the segment, Oliver lambasted slides from a payday lender's employee training manual which instructed employees to lure borrowers into a cycle of debt. Oliver also addressed states' efforts to stamp out the most predatory practices, likening efforts to restrict the industry to "legislative... Read more
Banks are lending to companies and individuals at the fastest pace since the financial crisis, propelling profits to near-record levels. U.S. banks posted $40.24 billion in net income during the second quarter, the industry's second-highest profit total in at least 23 years. Banks set aside less money to cover soured loans, helping to boost profits. At the same time, overall loan growth increased at its fastest quarterly pace since the financial crisis, topping $8 trillion in total loans outstanding for the first time since SNL began tracking the data in 1991. Commercial lending rose at an... Read more
A new guide aimed at public health advocates commends CDFIs for their role in financing healthy food retail options in low and moderate income communities. According to the guide, CDFI financing is useful for food retailers because CDFIs offer flexible terms and the ability to retire debt at an affordable rate over a long period of time. That flexibility is helpful as retailers establish their businesses and can offset the higher cost of opening stores in underserved areas. The CDFI Fund's Healthy Food Financing Initiative has expanded the activity of CDFIs in food retail financing,... Read more
The FTC and the White House have recently called for legislation that would inform users about the data social media companies collect and sell amid concerns about discriminatory data profiling. Seeta Peña Gangadharan of the New America Foundation echoes these concerns, arguing that big data can facilitate discriminatory practices in lending, hiring and marketing. Jake Rosenberg of Lendup counters that companies like his use big data to help lenders extend credit to the underbanked by creating new sources of credit behavior data for borrowers with scarce credit histories. Maurice Mitchell... Read more
ActiveHours is a new Palo Alto startup which aims to divert business from payday lenders by eliminating the very concept of a payday. The startup, which recently raised $4.1 million, distributes an app that allows hourly workers to immediately access pay they’ve already earned, without having to wait for their employer’s standard pay cycle. Users can see how much money they have earned and transfer any percentage of it into their bank account, essentially giving the user a cash advance. When payday rolls around, ActiveHours withdraws the same amount from the user’s account. ActiveHours... Read more
The CDFI Fund has opened the 2014 round of the New Markets Tax Credit Program. The program's notice makes available up to $5 billion in tax credit allocation authority. The New Markets Tax Credit provides a tax credit to investors who make qualified equity investments in Community Development Entities (CDEs) which then invest the capital into projects in low-income communities. Since its inception, the NMTC Program has made 836 awards to CDEs totaling $40 billion in tax credit allocation authority. The deadline for CDE Certification applications is August 22. The deadline for the NMTC... Read more
Bank employees are giving customers misleading or inaccurate information about their overdraft protection options, according to mystery shoppers working with the Woodstock Institute. The Federal Reserve Board requires that bank customers must “opt in” to banks' overdraft products. But mystery shoppers’ conversations with bank representatives revealed persistent misinformation about overdraft coverage. Often, employees did not explain the opt-in requirement and led people to believe that overdraft coverage was an automatic account feature. Representatives frequently gave inconsistent,... Read more
The $30 billion banks collect in overdraft fees each year may shrink if the Consumer Financial Protection Bureau imposes new rules on the practice. The spectre of new rulemaking has arisen in the wake of a new CFPB report which found that overdraft and non-sufficient funds fees account for about 75 percent of opted-in consumers’ total checking account fees, averaging over $250 per year. “Despite recent regulatory and industry changes, overdrafts continue to impose heavy costs on consumers who have... Read more
The acquisition of First Tuskegee Bank in Alabama by CDFI bank Liberty Bank & Trust Co. of New Orleans should have been routine. The deal would combine two small minority-owned institutions in the Southeast, giving them additional heft to cope with new regulations. It would also help Liberty expand its originations of consumer, mortgage and commercial loans while adding more low-cost deposits. But federal and state regulators still have not approved the application they received nearly a year ago, marking an unusually long delay for an acquisition of this size. The companies have... Read more
United Bank of Atmore, Ark. has announced a pledge of $17,000 to help the Atmore YMCA alleviate recent shortfalls that threatened to close the organization. United Bank’s commitment of $1,000 per month through December 2015 will allow the YMCA to continue providing recreational services to children, families and senior citizens. In addition to its financial commitment, the bank is helping the YMCA draft a grant application from the Alabama Historical Commission for capital enhancements. “Our commitment today will meet an immediate need, but it’s also reflective of United... Read more
Urban Partnership Bank has extended $38.7 million of credit to commercial borrowers so far in 2014. The bank's newsletter highlights several of the loans, including $1.1 million in financing for investment rentals in the Park Boulevard development, a new mixed-income community located in Chicago's South Side. The project is a regeneration of the area that was once the site of the Chicago Housing Authority's heavily distressed Stateway Gardens highrise public housing project. The Park Boulevard development will create much-needed affordable student housing for the nearby... Read more
Sunrise Banks of Minneapolis-St. Paul is exploring new ways of providing credit and financial services to the unbanked and underbanked through technology, says CEO David Reiling. The bank now offers microloans offered through employers as an employee benefit. The program is backed by software that quickly accepts an application for a microloan and provides an immediate decision, depositing funds in an employee’s bank account the next day or making them available on a prepaid card. “If you are really going to be in this business, you need to leverage technology in order to... Read more
In a recent interview, OneUnited Bank President Teri Williams discussed her career path, her new children's book, and OneUnited's efforts to foster financial comebacks for customers with damaged credit. Williams' new book, "I Got Bank," is a child-friendly guide to financial concepts. For Williams, who once aspired to be a teacher before entering finance, the book builds upon a long-held interest in education and helping disadvantaged communities. Education is also at the heart of the bank's Unity Visa card, which provides financial literacy training alongside safe credit... Read more
The CDFI Fund and Opportunity Finance Network will be hosting a training workshop July 30-31 at Kaiser Town Hall in Portland, Oregon as part of its Financing Community Health Centers Capacity Building Initiative series. The workshops help CDFIs develop the skills to finance and provide services to community health centers in medically underserved communities. CDFIs without community health center lending experience that have relevant community facilities or real estate activities, or CDFIs with existing CHC lending programs looking to expand, are encouraged to participate. The deadline for... Read more
An in-depth look by the CFPB into its consumer complaint database has yielded some surprising insights, including a lower-than-expected number of payday loan complaints. While 34% of complaints in the database regarded mortgages, 20% regarded debt collection and 14% concerned credit card products, just 1% were for payday loan products. The discrepancy may be due to the comparatively late rollout of the payday lending complaint system or to lower awareness of the CFPB complaint system among consumers targeted by payday lenders. The CFPB is set to introduce new payday lending regulations... Read more
According to a new survey of 100 bank executives, U.S. banks are increasingly setting their sights on underbanked customers. About 23% of bankers said underbanked customers present the greatest growth opportunity for their bank, up from 12% a year ago. Banks are interested in those customers because they spend more money on fees for cashing checks or ATMs than other customer segments. The survey also found that despite the growth of mobile banking, roughly 41% of bankers polled intend to increase the number of physical branch locations over the next 12 to 19 months, which could broaden... Read more
Although big banks tend to be ahead of the curve with online and mobile offerings, small banks have some advantages — such as better postcrisis reputations — that could put them streets ahead with millenials. "Does technology play a role? It is the role," said Joe Sullivan, chief executive of consulting firm Market Insights. Glen Fossella, a tech industry executive, says that millennials tend to tie brands to their self-image. For example, they may buy an iPhone in order to seem cooler or smarter than those who purchase an Android. Chicago-based Liberty Bank for Savings conducted a series... Read more